HYDERABAD: Close to three weeks since India saw its biggest indirect taxes reform, the after-effects does not seem to die down. With retail supermarkets in the city experiencing a shortage of supply from distributors, retailers complain that with this their business will have to function at break-even for at least two months until clarity on prices is ascertained.
The profits for certain supermarkets like Rationwala at Balkampet have reduced from 5 pc before GST to less than 1 pc now. As of now, only Hindustan Unilever Limited has updated their prices for a few of their products. All other companies are still in the process, he added.
While small retailers continue to suffer, retail chains like Ratnadeep, who have multiple retail outlets, seem to be not affected. “Though we are facing problems with shortage of supply, the effect will not be very minimal as compared to single retail outlets,” said Prem Raj, visualisation head, Ratnadeep stores. We have kept notice boards across our 33 outlets apologising for inconvenience caused, he added.
“Distribution of packaged goods have reduced so much that we are selling just rations,” said Pavan Reddy, a Kirana shop owner.
Interestingly, industry experts cite that it is more of a technical issue which many companies are already aware of that would cause the delay in supply. “When VAT was launched, it took six months for everything to settle down and the same is happening now. Since MNCs have a pan India reach, they are taking the time to get through with all distribution channels,” said Anil Reddy Vennam, former president of Federation of Telangana and Andhra Pradesh Chambers of Commerce and Industry.